§ 36-10.2-7. Funding improvement strategy procedure.
(1) In any case in which a plan is in endangered status for a plan year, except for a
plan year where a plan is already in a funding improvement period and meeting its
scheduled funding targets for the three (3) consecutive prior plan years, a funding
improvement strategy shall be implemented not later than June 30 following the date
the plan was certified as being in endangered status under § 36-10.2-6. The plan actuary shall submit preliminary funding improvement strategies including
a default strategy as described in subparagraphs (3) and (4) to the board for review
not later than January 1 following the date the plan was certified as being in endangered
status under § 36-10.2-6.
(2) The funding improvement strategy shall be formulated to achieve, based on reasonably
anticipated experience and reasonable actuarial assumptions, the following requirements:
(a) The plan's funded percentage shall improve in accordance with paragraph (i) or paragraph
(ii), applying the paragraph that produces the greater funded percentage increase
for the plan in a ten (10) year period.
(i) As of the close of a ten (10) year funding improvement period, the plan's funded percentage
shall equal or exceed the sum of:
(I) The plan's funded percentage as of the beginning of the plan year that the actuary
initially certified the plan as endangered; plus
(II) Fifty percent (50%) of the difference between eighty percent (80%) and the plan's
funded percentage under paragraph (I); or
(ii) The plan's funded percentage shall improve at the rate of at least one percent (1%)
annually until the plan's funded percentage equals or exceeds eighty percent (80%).
(b) In the event that the state or a local municipality, as the employer of a plan, determines
that, based on reasonable actuarial assumptions and upon exhaustion of all reasonable
measures, the plan cannot reasonably be expected to meet the guidelines of subdivisions
(i) and (ii), then the employer's legislative governing body shall provide a report
to the retirement board, no later than March 1 following the date the plan was certified
as being in endangered status under § 36-10.2-6, explaining why the plan is not reasonably expected to meet the guidelines of subdivisions
(i) or (ii) and provide a reasonable funding improvement strategy to emerge from endangered
status.
(3) Not later than January 1 following the date the plan was certified as being in endangered
status under § 36-10.2-6, the actuary shall provide to the board, and in the case of MERS plan shall also
provide to the impacted local municipality's legislative governing body, at least
five (5) funding improvement strategies but no more than ten (10) funding improvement
strategies showing revised benefit structures, revised contribution structures, or
both, which, if adopted, may reasonably be expected to enable the plan to meet the
applicable requirements found in subparagraph (2).
(4) In addition to any funding improvement strategies provided by the board in subparagraph
(3), the board shall include a default funding improvement strategy ("Default A�)
that shall show increases in employer and employee contributions under the plan necessary
to achieve the applicable requirements found in subsection (2), assuming no amendments
to reduce future benefit accruals under the plan.
(5) Not later than April 1 following the date the plan was certified as being in endangered
status under § 36-10.2-6, the board shall submit the "Default Aâ€� strategy as described in subparagraph (4)
and one additional funding improvement strategy, as selected by the board, to the
general assembly.
(6) Not later than June 30 following the date the plan was certified as being in endangered
status under § 36-10.2-6, the general assembly shall select and enact into law one of the two (2) submitted
funding improvement strategies. If no funding improvement strategy is approved by
the general assembly by June 30, the "Default A� strategy as described in subparagraph
(4) shall be enacted into law effective July 1 following the date the plan was certified
as being in endangered status under § 36-10.2-6. "Default Aâ€� shall remain in effect until either the actuary certifies under § 36-10.2-6 for a plan year that the plan is no longer in endangered status or the general assembly
selects a funding improvement strategy consistent with the provisions of this chapter.
(7) Notwithstanding any other law to the contrary, any reports and funding strategies
submitted to the board pursuant to this section shall be public records.